The General Fund Has the Following Transactions for 2020

Multiple Choice

The general fund has the following transactions for 2020:
•Issued $1,000,000 face value bonds with a coupon rate of 3%.
•Made a $100,000 principal payment on the bonds.
•Made a $25,000 interest payment on the bonds.
•Accrued interest due in 2021 on the bonds is $5,000.
What is the effect of the above transactions on the general fund's fund balance in 2020?

A) $30,000 decrease
B) $875,000 increase
C) $25,000 decrease
D) $970,000 increase